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Exhibit 4.1    
    

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH
SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER OR, IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO THE COMPANY, SUCH REGISTRATION IS UNNECESSARY FOR SUCH TRANSFER TO COMPLY WITH THE ACT.  

	Warrant No. 001	Date of Issuance: December 13, 2004

WARRANT TO PURCHASE COMMON STOCK

OF
  NEON SYSTEMS, INC.  

VOID
AFTER JUNE 13, 2008. 

        NEON
Systems, Inc., a Delaware corporation (the "Company"), hereby certifies that, for value received, ClientSoft, Inc. or its registered assigns (the "Holder"), is
entitled to purchase from the Company up to a total of 1,125,000 shares of Common Stock, $0.01 par value per share (the "Common Stock"), of the Company (each such share, a "Warrant Share" and all such
shares, the "Warrant Shares") at an exercise price equal to $4.80 per share (the "Exercise Price"), at any time and from time to time from and after the date hereof and through and including
June 13, 2008 (the "Expiration Date"), and subject to the following terms and conditions. The number of Warrant Shares and the Exercise Price shall be subject to adjustment pursuant to
Section 8 hereof. This Warrant
(this "Warrant") is issued pursuant to that certain Asset Purchase Agreement dated December 13, 2004 by and among the Company, ClientSoft, Inc. and U.S. Bank, National Association, as
escrow agent thereunder (the "Asset Purchase Agreement"). 

        1.    Registration of Warrant.    The Company shall register this Warrant, upon records to be maintained by the
Company for that purpose, in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. 

        2.    Exercise.    This Warrant shall be exercisable by the registered Holder, in whole or in part, at any time and
from time to time commencing on or after the date hereof and expiring on the Expiration Date. At 5:30 P.M., Houston, Texas time, on the Expiration Date, or, if such day is a day on which
banking institutions in Texas are closed, then on the next succeeding day that is not such a day on which banking institutions in Texas are closed, the portion of this Warrant not exercised prior
thereto shall be and become void and of no value. Such exercise shall be effected by: 

 

        (a)   the
surrender of the Warrant, together with a duly executed copy of the form of Notice of Election attached hereto, to the Company pursuant to the notice provisions of
Section 12; and 

        (b)   the
payment to the Company of an amount equal to the aggregate Exercise Price for the number of Warrant Shares being purchased (which may take the form of a "cashless
net exercise" if so indicated in the Exercise Notice). 

The
date such items in (a) and (b) are delivered to the Company (as determined in accordance with the notice provisions of Section 12) is an "Exercise Date." 

        3.    Cashless Net Exercise.    In lieu of exercising this Warrant pursuant to Section 2, the Holder may elect
to receive, without the payment by the Holder of any additional consideration, shares of Common Stock equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this
Warrant at the principal office of the Company together with notice of such election, in which event the Company shall issue to the holder hereof a number of shares of Common Stock computed using the
following formula: 

	  
 X =	 	Y (A - B)
 A	 

	

Where:	
 	

X=	
 	

The number of shares of Common Stock to be issued to the Holder pursuant to this net exercise
	 	 	Y=	 	The number of Warrant Shares in respect of which the net issue election is made
	 	 	A=	 	The fair market value of one share of the Common Stock at the time the net issue election is made
	 	 	B=	 	The Exercise Price (as adjusted to the date of the net issuance)

For purposes of this Section 3, the fair market value of one share of Common Stock as of a particular date shall be determined as follows: (i) if traded on a
securities exchange or through the Nasdaq Stock Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the thirty (30) day period
ending three (3) days prior to the net exercise election; (ii) if traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale
prices (whichever is applicable) over the thirty (30) day period ending three (3) days prior to the net exercise; and (iii) if there is no active public market, the value shall be
the fair market value thereof, as determined in good faith by the Board of Directors of the Company. 

        4.    Delivery of Warrant Shares.    

        4.1.  Upon
exercise of this Warrant and surrender of the original Warrant at the offices of the Company, the Company shall promptly (but in no event later than five business
days after the Exercise Date) issue or cause to be issued and cause to be delivered to Holder in Holder's name a certificate for the Warrant Shares issuable upon such exercise. The Holder shall be
deemed to have become holder of record of such Warrant Shares as of the Exercise Date. The 

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Company
shall, upon request of the Holder, use its best efforts to deliver Warrant Shares hereunder electronically through the Depository Trust Corporation or another established clearing corporation
performing similar functions. 

        4.2.  This
Warrant is exercisable, either in its entirety or, from time to time, for a portion of the number of Warrant Shares. Upon surrender of this Warrant following one
or more partial exercises, the Company shall issue or cause to be issued, at its expense, a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. 

        4.3.  The
issuance of certificates for Warrant Shares shall be made without charge to the Holder thereof for any issuance tax in respect thereof; provided, that the Company
shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the Holder. 

        5.    Fractional Shares.    No fractional shares shall be issued upon the exercise of this Warrant. In lieu of any
fractional share to which the Holder would otherwise be entitled, the Company will pay to the Holder an amount in cash equal to such fraction multiplied by the fair market value of the Common Stock of
the Company as of the applicable Expiration Date. 

        6.    Reservation of Stock.    The Company will at all times reserve and keep available out of its authorized Common
Stock or its treasury shares, solely for the purpose of issuance upon the exercise of this Warrant as herein provided, such number of Warrant Shares as shall then be issuable upon the exercise of this
Warrant. All such shares shall be duly authorized and, when issued upon exercise in compliance with the terms of this Warrant, shall be validly issued, fully paid and non-assessable. 

        7.    Transfer in Compliance with the Securities Act of 1933; Loss of Warrant.    

        7.1.  Restrictions on Transfers of Warrant. This Warrant and the Warrant Shares may not be sold or transferred unless either
(i) the transfer of such securities shall have been registered under the Securities Act of 1933, as amended (the "Act"), or (ii) the Company first shall have been furnished with an
opinion of legal counsel, reasonably satisfactory to the Company, to the effect that such sale or transfer is exempt from the registration requirements of the Act. 

        7.2.  Legends. It is understood that the certificates evidencing the Warrant Shares may bear a legend substantially in the
form of that below, as well as any other legends that may be required by applicable state securities laws: 

"THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED UNLESS A REGISTRATION
STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER OR, IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, SUCH REGISTRATION IS UNNECESSARY FOR SUCH TRANSFER TO COMPLY WITH THE ACT. 

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        7.3.  Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required by the Company) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor. 

        8.    Adjustment of Number of Warrant Shares and Exercise Price.    

        8.1   Adjustment. The number of Warrant Shares shall be subject to adjustment as follows: 

        (a)   In
the event there is a subdivision or combination of the outstanding shares of Common Stock into a larger or smaller number of shares, the number of Warrant Shares
shall be increased or reduced in the same proportion as the increase or decrease in the outstanding shares of Common Stock. 

        (b)   If
the Company declares a dividend on Common Stock payable in Common Stock or securities convertible into Common Stock, the number of Warrant Shares shall be increased,
as of the record date for determining which holders of Common Stock shall be entitled to receive such dividend, in proportion to the increase in the number of outstanding shares of Common Stock as a
result of such dividend. 

        8.2   Reorganization, Merger, Sale. If at any time while this Warrant, or any portion hereof, is outstanding and unexpired
there shall be (i) a reorganization (other than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), (ii) a merger or consolidation of the
Company with or into another corporation in which the Company is not the surviving entity, or a reverse triangular merger in which the Company is the surviving entity but the shares of the Company's
capital stock outstanding immediately prior to the merger are converted by virtue of the merger into other property, whether in the form of securities, cash, or otherwise, or (iii) a sale or
transfer of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, sale or transfer (each, a
"Change of Control"), this Warrant shall cease to represent the right to receive the Warrant Shares and shall automatically represent the right to receive upon exercise of this Warrant, during the
period specified herein and upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or property offered to the Company's holders of Common Stock in
connection with such Change of Control that a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such Change of Control if this Warrant had been
exercised immediately before such Change of Control, subject to further adjustment as provided in this Section 8. The foregoing provisions of this Section 8.2 shall similarly apply to
successive reorganizations, consolidations, mergers, sales and transfers and to the stock or securities of any other corporation that are at the time receivable upon the exercise of this Warrant. If
the per share consideration payable to the holder hereof for the Warrant Shares in connection with any such transaction is in a form other than cash or marketable securities, then the value of such
consideration shall be determined in good faith by the Company's Board of Directors. In all events, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be
made in the application of the provisions of 

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this
Warrant with respect to the rights and interests of the Holder after the transaction, to the end that the provisions of this Warrant shall be applicable after that event, as near as reasonably
may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant. 

        8.3   Reclassification, etc. If the Company, at any time while this Warrant, or any portion hereof, remains outstanding and
unexpired shall change its Common Stock (other than a change in par value, or solely as a result of a stock dividend, subdivision or combination) whether by reclassification, a merger or consolidation
not subject to Section 8.2, or otherwise (a "Reclassification"), or shall change, by a Reclassification, any of the securities as to which purchase rights under this Warrant exist, into the
same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as
the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change and the Exercise Price
therefore shall be appropriately adjusted, all subject to further adjustment as provided in this Section 8. The provisions of this Section 8.3 shall also apply to successive
Reclassifications. 

        8.4   Dissolution, Liquidation. If the Company, at any time while this Warrant, or any portion hereof, remains outstanding and
unexpired shall dissolve, liquidate or wind up its affairs, the Holder shall have the right, but not the obligation, to exercise this Warrant. Upon such exercise the Holder shall have the right to
receive, in lieu of the shares of Common Stock that the Holder otherwise would have been entitled to receive, the same kind and amount of assets as would have been issued, distributed or paid to the
Holder upon any such dissolution, liquidation or winding up with respect to such shares of Common Stock had the Holder been the holder of record of such shares of Common Stock receivable upon exercise
of this Warrant on the date for determining those entitled to receive any such distribution. If any such dissolution, liquidation or winding up results in any cash distribution in excess of the
Exercise Price provided for by this Warrant, the Holder may, at the Holder's option, exercise this Warrant without making payment of the Exercise Price and, in such case, the Company shall, upon
distribution to the Holder, consider the Exercise Price to have been paid in full, and in making settlement to the Holder shall deduct an amount equal to the Exercise Price from the amount payable to
the Holder. 

        8.5   Exercise Price. Whenever the number of Warrant Shares is adjusted as provided in this Section 8, the Exercise
Price shall be adjusted by multiplying the applicable Exercise Price immediately prior to such adjustment by a fraction, the numerator of which shall be the number of Warrant Shares immediately prior
to such adjustment and the denominator of which shall be the number of Warrant Shares immediately after such adjustment. 

        8.6   Notice. Upon any adjustment of the Exercise Price, then and in each such case the Company shall give written notice
thereof in accordance with Section 12 hereof, at the address of such Holder as shown on the books of the Company, which notice shall state the Exercise Price resulting from such adjustment,
setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. 

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        9.    Representations and Warranties by the Holder.    The Holder represents and warrants to the Company as follows: 

        9.1   The
Holder is purchasing the Warrant and the Warrant Shares for such Holder's own account for investment purposes only and not with a view to, or for the resale in
connection with, any "distribution" thereof for purposes of the Act. 

        9.2   The
Holder understands that the Warrant and the Warrant Shares have not been registered under the Act by reason of their issuance in a transaction exempt from the
registration and prospectus delivery requirements of the Act pursuant to Section 4(2) thereof, which exemption depends upon, among other things, the bona fide nature of Holder's investment
intent as expressed herein. 

        9.3   The
Holder understands that the Warrant and the Warrant Shares must be held by the Holder indefinitely, and that the Holder must therefore bear the economic risk of such
investment indefinitely, unless a subsequent disposition thereof is registered under the Act or is exempted from such registration. The Holder further understands that the Warrant and the Warrant
Shares have not been qualified under any state's blue sky laws by reason of their issuance in a transaction exempt from the qualification requirements of applicable blue sky laws, which exemptions
depend upon, among other things, the bona fide nature of the Holder's investment intent expressed above. In addition, the Holder understands that any certificate evidencing the Warrant and the Warrant
Shares will be imprinted with a legend which prohibits the transfer of the Warrant and the Warrant Shares unless they are registered pursuant to the Act or applicable state securities laws, or such
registration is not required in the opinion of counsel for the Company. 

        9.4   The
Holder is familiar with the provisions of Rule 144, promulgated under the Act, which, in substance, permits limited public resale of "restricted securities"
acquired, directly or indirectly, from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. The Warrant and the Warrant Shares may be resold in
certain limited circumstances subject to the provisions of Rule 144, which requires among other things: (1) the availability of certain public information about the Company,
(2) the resale occurring not less than one year after the party has purchased, and made full payment for, within the meaning of Rule 144, the securities to be sold; and, in the case of
an affiliate, or of a non-affiliate who has held the securities less than two years, (3) the sale being made through a broker in an unsolicited "broker's transaction" or in
transactions directly with a market maker (as said term is defined under the Securities Exchange Act of 1934) and (4) the amount of securities being sold during any three month period not
exceeding the specified limitations stated therein, if applicable. 

        10.    Rights of Holder.    This Warrant does not entitle the Holder to any rights of a stockholder of the Company
either at law or in equity, and the rights of any such Holder are limited to those expressed in this Warrant and are not enforceable against the Company, except to the extent set forth herein. 

        11.    Governing Law.    This Warrant shall be construed in accordance with the laws of the State of Delaware. 

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        12.    Notices.    All notices, requests, consents and other communications required or permitted under this Warrant
shall be in writing and shall be deemed to have been given when mailed by registered or certified mail, postage prepaid, or sent by an internationally recognized courier (e.g. FedEx), to the following
addresses: 

	To the Company:	 	NEON Systems, Inc.

14100 Southwest Freeway, Suite 500

Sugar Land, Texas 77478

Attention: Brian D. Helman

Facsimile No.: (281) 242-3880

Telephone No.: (281) 491-4200
	

 	
 	

with a copy to:
	

 	
 	

Wilson Sonsini Goodrich & Rosati, Professional Corporation

8911 Capital of Texas Highway North, Suite 3350

Austin, Texas 78759

Attention: Paul R. Tobias

Facsimile No.: (512) 338-5499

Telephone No.: (512) 338-5400
	

To Holder:	
 	

ClientSoft, Inc.

10988 SW 59th Ct.

Pinecrest, Florida 33156

Attention: William W. Wilson, III

Facsimile No.: (305) 513-5717

Telephone No.: (305) 666-1426
	

 	
 	

with a copy to:
	

 	
 	

Holland & Knight LLP

701 Brickell Avenue, Suite 3000

Miami, Florida 33131

Attention: Rodney H. Bell, Esq.

Facsimile No.: (305) 789-7799

Telephone No.: (305) 789-7639

        13.    Amendments.    No amendment, modification or other change to, or waiver of any
provision of, this Warrant may be made unless such amendment, modification or change is set forth in writing and is signed by the Company and the Holder. 

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        IN
WITNESS WHEREOF, the Company has executed this Warrant as of the 13th day of December, 2004. 

	 	 	 	 	NEON Systems, Inc.
	

 	
 	

 	
 	

By:	
 	

/s/  BRIAN D. HELMAN      
 Brian D. Helman, Chief Financial Officer
	

Holder:	
 	

 	
 	

 
	
ClientSoft, Inc.	
 	

 	
 	

 
	

By:	
 	

    /s/  WILLIAM W. WILSON, III      
 William W. Wilson, III

President, Chief Executive Officer

and Assistant Secretary	
 	

 	
 	

 

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NOTICE OF ELECTION FORM  

	 	Dated:	 	    
	, 20	    

        The undersigned hereby irrevocably elects to [check the applicable section] 

                                       
 Exercise
the attached Warrant for [all of the shares]
[                         of the shares] purchasable under the Warrant and hereby makes payment of
$                         in payment
of the actual exercise price thereof. 

        OR 

                                       
 Exercise
the attached Warrant for [all of the shares]
[                         of the shares] purchasable under the Warrant pursuant to the cashless net exercise provisions of
Section 3 of such Warrant. 

INSTRUCTIONS FOR REGISTRATION OF STOCK 

	Name:	 	    
 (Please typewrite or print in block letters)
	

Address:	
 	

    
    
    

	 	Signature:	 	    

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Exhibit 4.2    
    

REGISTRATION RIGHTS AGREEMENT  

        This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of December 13, 2004, by
and between NEON Systems, Inc., a Delaware corporation (the "Company"), and ClientSoft, Inc. (the  "Stockholder"). 

RECITALS  

        A.    Pursuant
to the Asset Purchase Agreement dated as of December 13, 2004 (the "Asset Purchase Agreement") by and
among the Company, the Stockholder and U.S. Bank National Association, as the escrow agent, the Company issued to the Stockholder a Warrant (the  "Warrant") to purchase 1,125,000 shares of the Common
Stock, $0.01, par value per share, of the Company (the "Company Common
Stock"), in partial consideration for the purchase by the Company of certain assets and the assumption of certain liabilities of the Stockholder, upon the terms and subject to
the conditions described in the Asset Purchase Agreement (the "Asset Purchase"). 

        B.    As
a condition to the closing of the Asset Purchase, the Company has agreed to grant to the Stockholder certain registration rights with respect to the shares of Company
Common Stock issuable upon exercise of the Warrant (the "Warrant Shares"), and to enter into this Agreement. 

        NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements herein contained, the Company and Stockholder
agree as follows: 

        1.    Definitions of Certain Terms.    As used herein, the following terms shall have the following meanings.
Capitalized terms used but not otherwise defined in this Agreement shall have the meanings given to them in the Asset Purchase Agreement. 

        (a)   "Business Day" means any day other than a Saturday or Sunday or a day on which banks in Houston, Texas are closed. 

        (b)   "Closing Date" means the Closing Date as defined in the Asset Purchase Agreement. 

        (c)   "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC issued
thereunder, as they may be in effect from time to time. 

        (d)   "Form S-3" means such form under the Securities Act as in effect on the date hereof or any
registration form under the Securities Act subsequently adopted by the SEC which similarly permits inclusion or incorporation of substantial information by reference to other documents filed by the
Company with the commission. 

        (e)   "Holder" means Stockholder and any other person or entity holding Registrable Shares to whom the registration rights
granted in this Agreement have been transferred pursuant to Section 8. 

 

        (f)    "Registrable Shares" means the Warrant Shares, and any other securities issued by the Company as a dividend or other
distribution with respect to, or in exchange for or in replacement of, such shares; provided, however, Registrable Shares shall not include shares of
Company Common Stock that have been disposed of pursuant to a registration statement under the Securities Act (including the Shelf Registration contemplated by this Agreement) or pursuant to
Rule 144 of the Securities Act or that can be sold without registration in accordance with Rule 144(k) of the Securities Act. 

        (g)   "SEC" means the United States Securities and Exchange Commission, or any governmental agency succeeding to its functions. 

        (h)   "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC issued
thereunder, as they may be in effect from time to time. 

        (i)    "Termination Date" means 5:00 PM Houston, Texas time on the second anniversary of the first date on which all or any
portion of the Warrant is exercised. 

        2.    Shelf Registration.    The Company agrees that it shall use its commercially reasonable efforts to prepare and
cause to be filed with the SEC as soon as practicable following the Company's filing of its annual report on Form 10-K for the fiscal year ended March 31, 2005, a
registration statement on Form S-3, or if the Company is not eligible to use Form S-3 for the registration of a secondary offering, on such form as may then be
available to the Company (the "Shelf Registration") under the Securities Act for an offering to be made on a delayed or continuous basis pursuant to
Rule 415 thereunder or any similar rule that may be adopted by the SEC and permitting sales in ordinary course brokerage or dealer transactions not involving any underwritten public offering,
covering all of the Registrable Shares. The Company shall use commercially reasonable efforts thereafter to cause the Shelf Registration to be declared effective by the SEC as promptly as practicable,
including, without limitation, responding as promptly as practicable to any comments of the staff of the SEC. The Company shall request acceleration of the effectiveness of the Shelf Registration as
promptly as practicable following the notification of the Company in writing by the staff of the SEC that it does not have any further comments to the Shelf Registration, and such request for
acceleration shall specify a date of effectiveness that is no more than three (3) business days after the date such request is filed. The Company may postpone the filing or the effectiveness of
the Shelf Registration for a period of up to sixty (60) days if the Company determines in good faith that the filing or effectiveness of the Shelf Registration would require the disclosure of
information that could be materially detrimental to the Company or its stockholders; provided, however,
that the Company shall not be required to disclose such information to the Holders. Subject to Sections 3 and 4, the Company shall use commercially reasonable efforts to keep the Shelf
Registration continuously effective until the earlier to occur of (A) the Termination Date and (B) the first date on which no Registrable Shares originally covered by the Shelf
Registration shall constitute Registrable Shares. The Shelf Registration shall state, to the extent permitted by Rule 416 under the Securities Act, that it also covers such indeterminate number
of additional shares of Company Common Stock as may become issuable upon the exercise of the Warrant pursuant to its terms in order to prevent dilution resulting from stock splits, stock dividends or
similar events. 

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        3.    Registration Procedures.    After the Company commences the registration of the Registrable Shares pursuant to
the Shelf Registration, the Company shall take commercially reasonable actions to permit registration and sale of the Registrable Shares pursuant to the Shelf Registration, including the following: 

        (a)   Prepare
and file with the SEC such amendments and supplements to the Shelf Registration and the prospectus used in connection with the Shelf Registration as may be
necessary to comply with the provisions of the Securities Act or to maintain the effectiveness of the Shelf Registration; 

        (b)   notify
the Holders of the filing of the Shelf Registration and each amendment and supplement thereto and furnish to the Holders such number of copies of the Shelf
Registration, each amendment and supplement thereto (in each case including all exhibits thereto), the prospectus included in the Shelf Registration (including any preliminary prospectus) and such
other documents as the Holders may reasonably request in order to facilitate the disposition of the Registrable Shares owned by the Holders; 

        (c)   use
commercially reasonable efforts to register or qualify such Registrable Shares under such other securities or "blue sky" laws of such jurisdictions and to do any and
all other acts and things that may be reasonably necessary or advisable to register or qualify for sale in such jurisdictions the Registrable Shares owned by the Holders;  provided, however, that the
Company shall not be required (i) to qualify to do business in any jurisdiction where it is not then so qualified or
(ii) to consent to general service of process in any jurisdiction where it is not then so subject to service of process; 

        (d)   use
commercially reasonable efforts as promptly as practicable to cause all Registrable Shares covered by the Shelf Registration to be listed on the Nasdaq Stock Market
or other securities exchange or market, if any, on which similar securities issued by the Company are then listed; 

        (e)   use
commercially reasonable efforts to file with the SEC in a timely manner all reports or other documents required of the Company under the Securities Act and Exchange
Act; and 

        (f)    permit
one counsel for Stockholder to review the Shelf Registration and all amendments and supplements thereto, and any comments made by the staff of the SEC concerning
the Holders and the Company's responses thereto, within a reasonable period of time (but in no event less than two (2) Business Days after the Stockholder has received such documents) prior to
the filing thereof with the SEC (or, in the case of comments made by the staff of the SEC, within a reasonable period of time following the receipt thereof by the Company). 

        4.    Stop Order; Amendment of Prospectus.    

        (a)   The
Company will notify the Holders promptly of (i) the issuance of any stop order suspending the effectiveness of the Shelf Registration or (ii) the
receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Shares for sale in 

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any
jurisdiction. Immediately upon receipt of any such notice, the Holders shall cease to offer and sell any Registrable Shares pursuant to the Shelf Registration in the jurisdiction to which such
stop order or suspension relates. The Company shall use commercially reasonable efforts to prevent the issuance of any such stop order or the suspension of any such qualification and, if any such stop
order is issued or any such qualification is suspended, to obtain as soon as possible the withdrawal or revocation thereof, and will notify the Holders at the earliest practicable date of the date on
which the Holders may offer and sell Registrable Shares pursuant to the Shelf Registration. 

        (b)   The
Company will notify the Holders promptly if the Company is in possession of material non-public information that an executive officer of the Company
determines in good faith should not be disclosed because it would be materially detrimental to the Company or its stockholders but would otherwise be required to be set forth in the prospectus used in
connection with the Shelf Registration (the "Prospectus"); provided, however, that the Company shall not
be required to disclose such event or facts, or the nature thereof, to the Holders. Immediately upon receipt of such notice, the Holders shall cease to offer or sell any Registrable Shares pursuant to
the Prospectus, cease to deliver or use such Prospectus and, if so requested by the Company, return to the Company, at the Company's expense, all copies (other than permanent file copies) of such
Prospectus. Promptly after the Company determines that the information may be included in an amendment or supplement to any Prospectus, the Company will use commercially reasonable efforts to amend or
supplement the Prospectus as promptly as practicable in order to set forth or reflect such event or state of facts. In the event that an executive officer of the Company determines in good faith that
the disclosure of such information would be materially detrimental to the Company or its stockholders, the Company shall be permitted to delay the filing
of such an amendment or supplement to such Prospectus for a period of time to extend no longer than sixty (60) days in any twelve (12) month period. The Company will promptly furnish
copies of such amendment or supplement to such Prospectus to the Holders and notify Holders when trading may once again commence. 

        (c)   Holders
that are employees of the Company or any subsidiary of the Company shall be subject to the Company's Code of Conduct and Insider Trading Policy. 

        5.    Information Concerning the Holders; Termination of Use of Shelf Registration.    

        (a)   The
obligations of the Company to take the actions contemplated by Sections 2 and 3 with respect to an offering of Registrable Shares shall be subject to the
condition that each Holder shall (i) conform to all applicable requirements of the Securities Act and the Exchange Act with respect to the offering and sale of securities and (ii) advise
each underwriter, broker or dealer through which any of such Registrable Shares are offered that such Registrable Shares are part of a distribution that is subject to the prospectus delivery
requirements of the Securities Act. Each Holder shall furnish to the Company in writing such information and furnish such documents as may be reasonably required by the Company in the preparation of
(A) a Prospectus (or any amendment or supplement thereto) with respect to any offering of Registrable Shares and (B) any qualification of such Registrable Shares under state securities
or "blue sky" laws pursuant to Section 3(b), and shall promptly notify the Company of the occurrence, from the date on which such information or documents are furnished to the date of the
closing for the sale of such 

4

 

Registrable
Shares, of any event relating to such Holder that is required under the Securities Act to be set forth in such Prospectus (or any amendment or supplement thereto). 

        (b)   The
rights of the Holders to sell Registrable Shares pursuant to the Shelf Registration shall terminate on the Termination Date. 

        6.    Expenses of Registration.    The Company shall pay all reasonable expenses incident to its performance of or
compliance with this Agreement and registration of Registrable Shares in connection herewith, including (a) all SEC, stock exchange or market and National Association of Securities
Dealers, Inc. registration and filing fees, (b) all fees and expenses incurred in complying with securities or "blue sky" laws, (c) all printing, messenger and delivery expenses
and (d) all fees and disbursements of the Company's independent public accountants and counsel (all of such expenses herein referred to as "Registration
Expenses"). The Registration Expenses shall not include (and the Company shall not be responsible for) any legal fees of the Holders or any sales or underwriting discounts,
commissions or fees attributable to the sale of the Registrable Shares, which shall be borne by the Holders. 

        7.    Indemnification and Contribution.    

        (a)   The
Company agrees to indemnify, to the extent permitted by law and subject to the terms of this Agreement, each Holder and its directors, officers, partners, members,
employees and agents and each person, if any, who controls such Holder or other person (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses
(including reasonable attorneys' fees) arising out of or based upon any untrue or alleged untrue statement of a material fact contained in the Shelf Registration (or any amendment thereto) or a
Prospectus (or any amendment or supplement thereto) or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein
in the light of the circumstances under which they were made not misleading; provided, however, that the Company shall not be liable to any Holder or
its directors, officers, partners, members, employees or agents or each person, if any, who controls such Holder or other person (within the meaning of the Securities Act) (i) to the extent
that any such loss, claim, damage, liability or expense arises out of, or is based upon any untrue or alleged untrue statement, or any omission, if such statement or omission shall have been made in
reliance upon and in conformity with information relating to such Holder or person furnished in writing to the Company by such Holder or person for use in the preparation of the Shelf Registration (or
any amendment thereto) or such Prospectus (or any amendment or supplement thereto), (ii) if a copy of any Prospectus (or any amendment thereto) relating to the Shelf Registration was not sent
or given by or on behalf of such Holder to a purchaser of the Holder's Registrable Shares, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the
Registrable Shares to such purchaser, and if such Prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage or liability and a copy of such
Prospectus was delivered to such Holder, or (iii) to the extent such loss, claim, damage, liability or expense arises out of or is based upon a purported transfer of Registrable Shares at a
time when transfers pursuant to the Registration Statement have been prohibited pursuant to Section 4(a), 4(b) or 4(c). 

5

 

        (b)   In
connection with the Shelf Registration, each Holder, severally and not jointly, will indemnify, to the extent permitted by law and subject to the terms of this
Agreement, the Company, its directors, officers, employees and agents and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses (including reasonable attorneys' fees) arising out of or based upon any untrue or alleged untrue statement of a material fact contained in the Shelf Registration (or any
amendment thereto) or a Prospectus (or any amendment or supplement thereto) or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the
statements made therein in the light of the circumstances under which they were made not misleading, to the extent that such untrue statement or omission was made in reliance upon and in conformity
with information furnished in writing to the Company by such Holder for use in the preparation of the Shelf Registration (or any amendment thereto) or a prospectus (or any amendment or supplement
thereto); provided, that the liability of each Holder hereunder shall be limited to the proportion of any such loss, claim, damage, liability or expense
which is equal to the proportion that the public offering price of the shares by such Holder under such registration statement bears to the total public offering price of all securities sold
thereunder, but not in any event to exceed the gross proceeds received by such Holder. 

        (c)   Each
party entitled to indemnification under this Section 7 (the "Indemnified Party") shall give notice to the
party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided
that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld or
delayed); and provided, further, that the delay or failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying
Party of its obligations under this Section 7, except to the extent that the Indemnifying Party shall have been materially adversely affected by such delay or failure. The Indemnified Party may
participate in such defense at the Indemnified Party's expense; provided, however, that the Indemnifying Party shall pay any such reasonable expense
if the Indemnified Party shall have reasonably concluded that there may be a conflict between the positions of the Indemnifying Party and the Indemnified Party in conducting the defense of any such
claim or litigation resulting therefrom. No Indemnified Party shall consent to entry of any judgment or settle any claim or litigation without the prior written consent of the Indemnifying Party. 

        (d)   If
the indemnification provided for in this Section 7 from the Indemnifying Party is unavailable to an Indemnified Party hereunder in respect of any losses,
claims, damages, liabilities or expenses referred to therein as a result of a judicial determination that such indemnification may not be enforced in such case notwithstanding this Agreement, the
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions which resulted in such losses, claims,
damages, liabilities or expense, as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among
other things, whether any action in question, including any untrue or alleged untrue statement of material fact or 

6

 

omission
or alleged omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such action; provided, however, that 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 and no
Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Shares offered by it pursuant to such Shelf Registrations. 

        8.    Transfer of Registration Rights.    The registration rights of Stockholder under this Agreement with respect to
any Registrable Shares may be transferred to any transferee in a transfer that complies with Section 9.4 of the Asset Purchase Agreement who is a stockholder, noteholder or key employee
incentive plan participant of Stockholder as of the date hereof; provided that the Company is given written notice by Stockholder at the time of such
transfer stating the name and address of the transferee and identifying the Registrable Shares with respect to which the rights under this Agreement are being assigned and such transferee executes and
delivers such agreements as the Company may reasonably require in order to confirm that such transferee agrees to be bound by this Agreement. 

        9.    Amendment of Registration Rights.    This Agreement may not be amended, modified or supplemented by the parties
hereto in any manner, except by a written instrument that is signed by the Company and the Holders that then hold a majority in interest of the Registrable Shares. 

        10.    Termination.    This Agreement shall terminate at the earlier of (i) 5:00 PM Houston, Texas time on the
Termination Date and (ii) the first date on which all Registrable Shares originally covered by the Shelf Registration shall no longer constitute Registrable Shares. Upon termination of this
Agreement, the Company may terminate the Shelf Registration. Notwithstanding the termination of this Agreement, the provisions of Sections 1, 6, 7, 10, 12, 13, 14, 15, 16, 17 and 18 shall
survive such termination. 

        11.    Grant of Additional Registration Rights.    The Holders acknowledge that the Company may grant registration
rights to other persons and entities in the Company's sole and absolute discretion, so long as such registration rights do not impair the Company's ability to perform its obligations under this
Agreement. 

        12.    No Waiver.    The terms and conditions of this Agreement may be waived only by a written instrument that is
(a) signed by a Holder, in the case where such Holder is waiving compliance and (b) signed by the Company in the case where the Company is waiving compliance. The failure of any party
hereto to enforce at any time any of the provisions of this Agreement shall in no way be construed to be a waiver of any such provision, nor in any way to affect the validity of this Agreement or any
part hereof or the right of such party thereafter to enforce each and every such provision. No waiver of any breach of or non-compliance with this Agreement shall be held to be a waiver of
any other or subsequent breach or non-compliance. The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies that any party may otherwise have
at law or in equity. 

7

 

        13.    Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to applicable principles of conflicts of law. Each of the parties hereto irrevocably consents to the exclusive jurisdiction of any court located within the State of Delaware,
in connection with any matter based upon or arising out of this Agreement or the matters contemplated herein, agrees that process may be served upon them in any manner authorized by the laws of the
State of Delaware for such persons and waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction and such process. 

        14.    Notices.    All notices and other communications hereunder shall be in writing and shall be deemed given if
delivered personally or by commercial delivery service, or mailed by registered or certified mail (return receipt requested) or sent via facsimile (with confirmation of receipt) to the parties at the
following address (or at such other address for a party as shall be specified by like notice): 

	(i)
	if
to the Company, to:

	

	NEON
Systems, Inc.

14100 Southwest Freeway, Suite 500

Sugar Land, Texas 77478

Attention: Brian D. Helman

Facsimile No.: (281) 242-3880

Telephone No.: (281) 491-4200

	

	and
a copy to:

	

	Wilson
Sonsini Goodrich & Rosati, Professional Corporation

8911 Capital of Texas Highway, Suite 3350

Austin, Texas 78759

Attention: Paul R. Tobias

Facsimile No.: (512) 338-5499

Telephone No.: (512) 338 5400

	(ii)
	if
to the Stockholder, to:

	

	ClientSoft, Inc.

10988 SW 59th Ct.

Pinecrest, Florida 33156

Attention: William W. Wilson, III

Facsimile No.: (305) 513-5717

Telephone No.: (305) 666-1426 

8

 

	

	and
a copy to:

	

	Holland &
Knight LLP

701 Brickell Avenue, Suite 3000

Miami, FL 33131

Attention: Rodney H. Bell, Esq.

Facsimile No.: (305) 789-7799

Telephone No.: (305) 789-7639 

        16.    Construction of Agreement.    The titles and headings herein are for reference purposes only and shall not in
any manner limit the construction of this Agreement which shall be considered as a whole. The words "include," "includes" and "including" when used herein shall be deemed in each case to be followed
by the words "without limitation." The parties hereto agree that they have been represented by counsel during the negotiation, preparation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or
document. 

        17.    Entire Agreement, Assignability, etc.    This Agreement and the Asset Purchase Agreement and the documents and
other agreements among the parties hereto and thereto as contemplated by or referred to herein or therein
constitute the entire agreement among the parties with respect to the subject matter hereof and supersede in their entirety all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder, except as otherwise expressly provided herein and shall not be
assignable by operation of law or otherwise, except by the Company upon an acquisition of the Company, or by a Holder as provided in Section 8. 

        18.    Validity.    The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, each of which shall remain in full force and effect. 

        19.    Counterparts.    This Agreement may be executed in one or more counterparts, all of which together shall
constitute one and the same Agreement. This Agreement, once executed by a party, may be delivered to any other party hereto by facsimile transmission. 

[Remainder of page intentionally left blank. Signature page(s) to follow.] 

9

        IN
WITNESS WHEREOF, the parties have executed or caused this Registration Rights Agreement to be executed by their duly authorized respective officers (as applicable) as of the date
first written above. 

	 	COMPANY:
	

 	

NEON SYSTEMS, INC.
	

 	

By:	
 	

    /s/  BRIAN D. HELMAN      
 Brian D. Helman, Chief Financial Officer
	

 	
HOLDER:
	

 	

CLIENTSOFT, INC.
	

 	

By:	
 	

    /s/  WILLIAM W. WILSON, III      
 William W. Wilson, III

President, Chief Executive Officer and

Assistant Secretary

QuickLinks

Exhibit 4.2

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